KOSPI ranked last among major global stock indices in one-month returns as of July 16, falling 24.75% from June 18 to July 16, according to Investing.com data reported on July 20. The index closed at 6516.27 on July 20, down 4.46%. The decline was driven by intensified selling pressure in semiconductor stocks amid rising oil prices from Middle East geopolitical risks, according to SK Securities researcher Jo Jun-ki. KOSPI's drop exceeded Russia's RTSI index decline of 24.21% over the same period, making it the worst performer among major markets tracked.
KOSPI Records 24.75% One-Month Decline Through July 16
KOSPI fell from 9063.84 on June 18 to 6820.60 on July 16, a 24.75% decline, according to Investing.com. This performance was worse than Russia's RTSI (-24.21%) and MOEX (-19.09%) indices. Including the July 20 closing price of 6516.27, the decline deepened to 28.51%.
Most global markets showed negative returns over the recent one-month period. Hong Kong's Hang Seng Index recorded the best performance among major indices, rising only 4.39%. The U.S. Dow Jones Industrial Average gained 1.13%, while the S&P 500 fell 0.57%.
Technology-heavy indices experienced significant declines. China's Shenzhen Composite Index dropped 14.50%, Japan's Nikkei 225 fell 9.98%, and Taiwan's TAIEX declined 8.17%. The Shenzhen Composite, Nikkei 225, and TAIEX all peaked on June 22 before declining, showing similar patterns to KOSPI.
Jo Jun-ki, SK Securities researcher, stated: "Selling pressure concentrated in semiconductor stocks recently spread to U.S. markets and others as oil prices rose due to intensifying Middle East geopolitical risks, widening the decline."
Samsung Electronics and SK Hynix Comprise Over Half of KOSPI Market Cap
Samsung Electronics and SK Hynix account for more than half of KOSPI's market capitalization, a structure that amplified volatility, according to foreign media reports. One foreign outlet reported: "Because Samsung Electronics and SK Hynix have high weight in KOSPI, single-stock leveraged products have a greater impact on the index than in other countries." This contrasts with NVIDIA's approximately 7% weight in the S&P 500.
Alexander Redman, chief strategist at Hong Kong investment firm CLSA, stated: "Korea is still the largest overweight market in the portfolio, but I have started to reduce the weight. What is concerning is that retail investors are in the driver's seat. They use a lot of margin trading."
Foreign media noted: "A bear market is typically considered when an index falls more than 20% from its peak," presenting a negative view of KOSPI's recent performance.
Analysts Cite Valuation Attraction and Big Tech Earnings as Key Factors
Domestic securities firms view a rebound as possible. KOSPI's year-to-date return stands at 54.63% as of July 20, still ranking first globally.
Jo Jun-ki stated: "The Korean stock market's valuation attractiveness has increased due to excessive declines. It is an environment where rebound buying could enter at any time. Big tech earnings starting this week will be a watershed."
FAQ
What was KOSPI's one-month performance through July 16?
KOSPI fell 24.75% from June 18 to July 16, ranking last among major global stock indices tracked by Investing.com. The index dropped from 9063.84 to 6820.60 over this period.
Why did KOSPI stocks decline more than other markets?
SK Securities researcher Jo Jun-ki attributed the decline to intensified selling pressure in semiconductor stocks as oil prices rose due to Middle East geopolitical risks. The concentration of Samsung Electronics and SK Hynix, which comprise over half of KOSPI's market cap, amplified the volatility according to foreign media reports.
What do analysts say about KOSPI's outlook?
Jo Jun-ki from SK Securities stated that KOSPI's valuation attractiveness has increased due to excessive declines and identified big tech earnings starting this week as a watershed. KOSPI's year-to-date return remained at 54.63% as of July 20, still ranking first globally.
